Multinational corporations function on a large scale and own or control production of goods or services in one or more countries other than their home country. These companies produce large amount of wealth. Their operations are so huge that sometimes their sales turnover exceeds the GROSS NATIONAL PRODUCT of some developing nations. For example, the physical assets of IBM crosses 8 billion dollars.
Some distinct characteristics of MNC’s are as follows −
Centralized Control − MNCs have their branches in different countries. These branches are monitored, controlled and managed by centralized offices or the headquarters usually located in the home countries.
Professional management − MNCs hire qualified, professional, and skilled people. They make all possible efforts to keep their employees updated by ensuring proper training on a regular basis.
International operation − MNCs establish their branches, plants, and offices in more than one country. They operate through a network of branches, subsidiaries and affiliates in host countries. For example, Coca Cola, Apple, etc.
Sophisticated Technology − MNCs adapt to the latest trends and follow advanced technology to supply world class products. They use capital-intensive technology and innovative techniques of production.
The presence of MNCs is very important for countries to lead in the economic front.